European Markets Close Higher As Stocks Recover On Bargain Hunting
(RTTNews) - European stocks managed to close higher on Tuesday despite staying somewhat sluggish at times with investors largely staying cautious and making selective purchases after recent sharp losses.
Although worries about rising coronavirus cases persisted and reports of fresh lockdown restrictions in some countries raised concerns about growth, bargain hunting and short-covering after Monday's sharp setback pushed stock prices up in today's session. Data showing an improvement in Eurozone consumer confidence helped as well.
The British pound recovered some lost ground as Bank of England Governor Andrew Bailey downplayed the prospect of negative interest rates in the future.
As escalating Covid-19 cases threaten the economic outlook, the central bank was looking hard at how it could support the economy further, Bailey said in a British Chambers of Commerce webinar.
British Prime Minister Boris Johnson told people to work from home and announced new restrictions on pubs, bars and restaurants.
The pan European Stoxx 600 advanced 0.2%. The U.K.'s FTSE 100 climbed 0.43%, Germany's DAX gained 0.41% and Switzerland's SMI ended 0.29% up, while France's CAC 40 declined 0.4%.
Among other markets in Europe, Austria, Czech Republic, Denmark, Finland, Iceland, Netherlands, Norway, Poland, Russia, Sweden and Turkey closed higher.
Belgium, Greece, Ireland, Portugal and Spain ended weak.
In the UK market, Kingfisher soared more than 10% British American Tobacco, Smiths, Imperial Brands, IAG, Royal Dutch Shell, Royal Bank, BP, Standard Chartered, Lloyds Banking Group and Unilever all moved higher and recorded strong gains.
On the other hand, Hiscox slid nearly 7% and Hikma Pharmaceutical lost 4.7%. Whitbread declined more than 2.5% after announcing thousands of job cuts across its Premier Inns, Beefeater and Brewers Fayre sites.
Persimmon, Anglo American and Prudential declined 1.6 to 2.5%.
In Germany, HeidelbergCement, Wirecard, Fresenius Medical Care, Infineon Technologies, SAP, Henkel, Siemens, Volkswagen and Linde gained 1 to 2.5%.
Shares of GEA Group AG rallied sharply after the company announced that it is selling the compressor manufacturer Bock, which is in GEA's Refrigeration Technologies division, to NORD Holding. The parties have agreed not to disclose the financial details of the deal.
Lufthansa, Thyssenkrupp and Allianz declined sharply.
In the French market, Unibail Rodamco surged up 5.2%. Peugeot rallied more than 3.5%. Renault, Technip, Carrefour, Saint Gobain and Valeo were among the other prominent gainers.
Airbus Group shares declined by about 2.7%. The Group's CEO Guillaume Faury told French radio station RTL that the situation is so serious and no one can guarantee there won't be compulsory redundancies, if the situation evolves further.
Accor, Sanofi and Kering ended lower by 1.4 to 2.7%. LVMH shares declined by about 1.1% as U.S. jewelry brand Tiffany & Co won approval by the Delaware Chancery Court to have its lawsuit against the French conglomerate fast-tracked. However, the court has not agreed to Tiffany's request for trial before November 24.
In economic news, preliminary data from the European Commission showed Eurozone consumer confidence improved more-than-expected in September to its highest level in six months.
The flash consumer confidence index climbed to -13.9 from -14.7 in August. Economists had expected a score of -14.6. The latest reading was the highest since March, when it was at -11.6.
The corresponding index for EU rose to -14.9 from -15.5 in August. That is also the highest since March, when the coronavirus, or Covid-19, pandemic was just starting to spread in the region.
Sweden's central bank left its key interest rate unchanged at zero and maintained asset purchases and liquidity provisions, and reiterated that the rate will remain at the current level in the coming years in the backdrop of the high uncertainty surrounding the economic outlook due to the coronavirus pandemic.
The repo rate has been at zero since January when it was hiked by 25 basis points. The bank left the rate steady for a fifth straight session.
The latest projections from the bank showed the repo rate remaining at zero through the third quarter of 2023.
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